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Putin's Interview with Xinhua, October 2011

Interviewee: Vladimir Putin
Published October 11, 2011



Putin's Interview with Xinhua, October 2011

Russian Prime Minister Vladimir Putin gave these remarks at an interview with Xinhua News in China on October 11, 2011.

Question (via translator): Mr Putin, I’m a deputy editor-in-chief of the Xinhua news agency. And this is a well-known CCTV anchor.

Vladimir Putin: Pleased to meet you.

Question: You spoke with us at the Russian embassy in China two years ago, on October 13. And we still remember that interview in detail.

Vladimir Putin: I’m very glad.

Question: I’d like to begin by wishing you a happy birthday from all of my fellow journalists.

Vladimir Putin: Thank you very much.

Question: This year marks the 10th anniversary of the treaty on neighbourly relations, friendship and cooperation between our two countries. How would you assess the current state of Russian-Chinese relations? And which areas of cooperation do you think need to receive a boost?

Vladimir Putin: This is a fundamental document, which has enabled us to rebuild relations between our two countries on an entirely new foundation. Through this accord, we have managed to raise relations between Russia and the People’s Republic of China to a very high level – record-high, perhaps. In politics, we are now operating on a level of trust that we've never known before. And we work together very closely on the international stage these days.

There is no doubt that both China and Russia are world powers, and each country is itself a major player on the international arena. But Russian-Chinese interaction on the global stage has become a crucial factor in world politics. We’ve learned to act hand-in-hand so as to uphold our legitimate international interests even more effectively.

This treaty enables us to cooperate in some highly sensitive areas, such as military technology notably. We’re talking about multibillion-dollar deals, and a need to infuse our cooperation with a new dimension. We’re already running joint R&D projects and are jointly manufacturing certain types of equipment. We made one more step forward on this path during today’s talks, by agreeing to set up maintenance and repair workshops for Russian hardware in China.

Finally, we’ve brought our economic cooperation to new heights. Before the 2008 crisis, bilateral trade reached a peak of $55.9 billion. And now we have not only returned to this pre-crisis level, but have surpassed it. The turnover this year will be no less than $70 billion, and may perhaps even grow as high as $80 billion. And we have every opportunity to bring our bilateral trade up to at least $100 billion by the year 2015 and further to $200 billion by 2020.

Take a look at the cultural cooperation that is happening these days: A Year of Russian Culture, a Year of Chinese Culture, a Year of the Russian Language in China, a Year of the Chinese Language in Russia… I personally enjoyed watching the events of the Year of the Russian Language in China. We were surprised to see so many people taking part in the language contests, as well as the enthusiasm with which many of the participants advanced through the competitions.

Of course, we did what we could to contribute to the relief efforts as the Chinese people tried to cope with the aftermath of a devastating earthquake [in 2008]. For us, this course of action in responding to the tragedy was completely natural. And at the time, as you know, we invited children from the hardest-hit Chinese regions to come to Russia. President Hu Jintao supported this initiative and subsequently made a return invitation for Russian children to visit China.

All this speaks to the fact that we have, indeed, reached a record-high level in our interstate relations. And we’ve done so by relying on the treaty that you mentioned.

Question: I remember very well that during the Sichuan earthquake relief effort, the last person to be recovered alive from the debris was rescued by a Russian team.

Vladimir Putin: This may be. Indeed, we have an excellent rescue service, outfitted with all necessary equipment.

But this isn’t the only area in which we cooperate. I know for a fact that when a disaster occurs in Russia, our Chinese friends respond immediately, offering us empathy as well as material aid. This adds to the positive atmosphere of the relationship between our two nations.

Question: A lot of media outlets, including ones in China, Russia and other countries, are covering your visit extensively. This is perhaps largely due to the fact that this is your first significant visit after you announced your decision to stand in Russia’s presidential election next year. Mutual understanding was achieved in many areas during this visit and contracts worth of several billion dollars were signed. Does this visit have a special meaning for you?

One more question: did you manage to make any progress in key areas of cooperation, such as gas supplies?

Vladimir Putin: I don’t think that gas supplies are among the key areas of our cooperation. There are many aspects to our cooperation, and it is becoming increasingly diversified. I believe that cooperation in high-tech industries should come first in our relations – not just conventional high-tech industries, not just machine building, but aviation and aircraft manufacturing as well. This is an area where we absolutely have shared national interests. Certainly, we need to work together in order to establish a respectable presence on the global markets, for example in building wide-body aircraft; we need to join our technological and financial capabilities.

There are other spheres, such as nanotechnology, biotechnology, and medicine. We have a highly diversified package of proposals in power engineering as well. Yes, we do work in the field of oil and gas, that is raw hydrocarbon materials. However, this work goes beyond prospective gas supplies to China and includes the joint development and production of hydrocarbons, including in Udmurtia, Russia. It also includes prospective cooperation in the development of the Sakhalin-3 project in the Russian Far East. The issue is also about prospective joint work under the Magadan-1 shelf project. Certainly, this includes potential supplies of natural gas to China along the eastern and western routes. Our Chinese friends believe that the western route that goes through Gorny Altai is more important to them during the initial phase. We are looking into the possibility of supplying gas along the eastern route starting in Vladivostok. We have just completed construction of a pipeline running from Sakhalin via Khabarovsk to Vladivostok. Once the throughput capacity of this pipeline increases, we can start thinking about adding this pipeline to our gas supply arrangements, including gas liquefaction projects.

Certainly, pricing is a substantial issue. I have already mentioned it today at our meeting with the State Council premier, saying that the seller always wants to sell high and the buyer always wants to buy cheap. We don’t deal with trading issues at the level of politics; this area is the responsibility of our respective economic agents. I believe they will find a fair solution to this issue that will be mutually beneficial for both China and Russia.

I don’t want to go into details now, because business negotiations are a complicated matter. Similar to medicine, it’s very important to focus on doing no harm. However, we know what China needs, and China knows what we can supply. The resource base is vast, and it can be used to meet our Chinese friends’ needs for this type of fuel. In addition to economic and energy problems, this will solve environmental issues as well, because gas in the most environmentally friendly hydrocarbon fuel.

We have also resumed supplying electricity to China and we are working to build high-voltage overhead power lines. As far as I know, the Amur River overpass has already been completed. The issue is about the potential construction of additional power generation plants in Russia. The next area of cooperation includes coal supplies. Several Russian companies are already working with their Chinese partners in the area of coal supplies, and they have good projects seeking to expand cooperation with the direct participation of our Chinese friends.

Finally, nuclear power engineering. We all remember and are saddened by the tragedy that took place in Japan. However, we are also aware that countries like China and Russia cannot do without the nuclear energy. Therefore, our goal is not to get scared and shut down everything. Conversely, our goal is to use the latest technologies that would preclude any chance of unwanted developments.

We have completed the first phase of the Tianwan nuclear power station. The work was performed according to the highest international standards using the most advanced technological processes both in terms of efficiency and safety. We have completed construction of an experimental fast neutron reactor nine months ahead of schedule. I am here to say that this is the most advanced equipment and technology in the world; there are only four such reactors in the world: two in Russia, one in Japan, and now one in China. The range of our economic relations is varied and includes many areas. Certainly, gas cooperation can reach a large scale but again we will strive to reach compromises that are acceptable for both sides.

Question: The figure of 100 billion dollars by 2015 doesn’t look very impressive for such major nations who have established an unprecedented level of political trust.

Vladimir Putin: I agree. We can do a lot more to surpass this figure ahead of our projections and achieve other goals by 2015. This is realistic. I’ve yet to mention cooperation in such areas as space exploration, shipbuilding and so on. The project for building a wide-body aircraft alone can do a lot to further develop high technology in Russia and China. So far, China and increasingly Russia have been relying on purchasing aviation equipment either from the United States or Europe. God bless our foreign partners, but countries like Russia and China are fully capable and should produce such equipment themselves, all the more so since there’s nothing new about it for Russia; we just need to expand our technical base, increase our human capital and raise the scientific level that Russia has traditionally enjoyed. The availability of markets in China and Russia is a big advantage. In fact, we have many similar areas of potential cooperation. If we focus on them, we will be able to achieve much better results than the ones that I mentioned earlier in our conversation.

Question: You have come here on an Il-96. It must be a very good plane. We have never used it.

Vladimir Putin: It’s a good machine, good Russian-made engines. Things are constantly changing in today’s world. The United States manufactures almost all types of aircraft. But not all. There is a small aircraft, Amfibia, which uses Be-200 jet engines. Only Russia makes these machines, no one else anywhere in the world. Certainly, the United States can secure leadership positions in major segments of this market, but Europe cannot do so. They had to combine their efforts and establish the European Aeronautic Defence and Space Company. It includes Germany, France, Spain and other European nations. What we need is, I repeat, the unification of human, scientific, technical and financial resources and the availability of markets.

Question: Certain political analysts and commentators believe that Russia and China, these two fast-growing emerging economies, can seriously influence and even lead the establishment of a new world order. In particular, cooperation among the BRICS countries has been promoted strongly. How, in your opinion, are Russia and China cooperating in the area of reforming the international economic system?

Vladimir Putin: I am not sure if the translation was accurate. First, you mentioned a new world order and then you referred to reforming the existing one. If the translation was accurate, then there’s a difference between establishing a new world order and reforming the existing one. This is my first point. I think that we should be talking about reforming existing arrangements, primarily, global financial entities, such as the International Monetary Fund and the World Bank. Certainly, I agree with you on this point: BRICS countries should enjoy an elevated status in these international institutions given their growing economic role. The situation with hedge funds and other modern instruments needs to be sorted out; the volatility of the markets for mineral resources should be brought down; the focus should be on the real sector of the economy, and speculative activities should be restricted. In this sense, BRICS countries, including China and Russia, can and must have their say, and they have a positive role to play in stabilising the global economy.

Question: We have been talking about the global economy. We all know that Europe is currently the scene of a growing sovereign debt crisis, in addition to the banking crisis. Have they had any effect on Russia? I also know that you bitterly criticised America over this, saying America is a parasite on the global economy. What do you think should be done to alter the situation?

Vladimir Putin: I want to say right away that, thank God, there is no banking crisis, at least not yet. There are financial problems – that’s true, but they have not yet had any tragic consequences for the financial system and major financial institutions. Moreover, the leaders of Europe’s leading nations – France and Germany – have announced that they are considering a possible bailout of financial institutions hit by the debt crisis in individual eurozone countries. This is clearly a very positive signal. Debt problems, of course, exist, stemming from the lack of proper fiscal discipline. But to date this remains more a political than a financial problem.

What is this political problem all about and why is it not yet a financial issue? The eurozone’s most acute problem today is Greece, but, if memory serves, Greece accounts just for 2% of Europe’s GDP. These problems can, of course, be addressed and resolved: various experts put the figure at between one and 1.5 trillion euros. That is certainly no small sum; it’s sizeable, but it is manageable for the eurozone as a whole. This is not all that much for Europe; although sizeable it is, of course, manageable. So, why is it a political problem? Because releasing these recourses means Europe’s leading nations backing up those who find themselves in deep water. That calls for a certain degree of political courage on the part of their leaders, because their respective populations would obviously not welcome these developments.

But ultimately, it will benefit united Europe as a whole. So something must be done. Why are we talking about it? Because all those developments, unfortunately, have negative implications for the global economy. Incidentally, I do not think BRICS countries could play any special role here. Europe’s great powers have sufficient resources to resolve these problems themselves.

As regards my comments on the American economy, I do not believe I said anything extraordinary. You can listen to any number of European experts, leaders, government officials or heads of financial and economic institutions in these countries – in Europe’s leading states: they all say the same thing. I added nothing new. If, of course, debts and expenses grow, it means the country concerned is enjoying all the good things of life by building up debt. What is happening now? Today the Federal Reserve System is buying up treasury bonds, or simply printing money. I am not going to pass any judgments on this. Maybe our American counterparts have a better and more accurate understanding of the situation than we do in other countries, but that was not how they advised us to behave, back in the day. I reiterate: perhaps at this point certain measures are necessary, but there are nonetheless certain limits. That’s politics.

Also, I did not say that America is a parasite on the global economy. It is freeloading on the dollar’s monopoly position as virtually the only world currency. That’s the issue. I think this is bad both for the global economy and for the United States itself, because it has a slackening effect and leads to the violation of fiscal  discipline. But I do not want my comments to be taken as unfounded criticism or motivated by a desire to sling mud at anybody. It’s not like that. All countries, one way or another, run into difficulties. This is nothing to be glad about there, all of us – this means our European colleagues, our American colleagues, and the BRICS countries – should get together – perhaps in the G20 format – and work out how we can all get out of this situation. We need to find commonly agreed solutions.

Nobody today is interested in rocking the boat – a boat globalisation has put us all in. We need to tread carefully in order not to rock it, let any water in, or capsize.

Question: Considering the current economic situation, many commentators, especially Western ones, warn that the global economic slowdown will inevitably affect Russia’s growth, effectively slowing it down as soon as next year. What is your reaction to these estimates? Russia’s current policy focuses on modernisation and innovation. What is the ultimate goal of this policy?

Vladimir Putin: We are closely following developments within the country and outside Russia as well. The Russian economy is still quite vulnerable, and continues to depend on international markets. The reason for this is that a large part of national revenues depends on a small number of export-oriented commodities, such as oil and gas, chemicals and metals. Any sort of crisis in developed economies that consume these products has an immediate impact on consumption, which of course brings our exports and revenues down. What I just described is known as commodity dependence. It is for this reason – or, at least, this is one of the main reasons – that our end goal is to diversify our economy, to make it innovation-based to a larger extent, to make it competitive and resistant against international market volatility. And we are indeed moving in this direction, slowly but surely, though not as quickly as we would like. This policy has yielded results. For example, we have earned some additional funds for the federal budget, more than two-thirds of which is revenue that comes from sources other than oil and gas, which is an encouraging trend.

As a further result of the implementation of this programme, Russia’s relations with China will surely improve, rather than deteriorate. This is because we are not planning to cut production or sales of mineral resources that China and our other partners need. The idea is that the structure of the industries needs to change, which would consequently alter the structure of our national revenues. We have already included this plan in our long-term strategy until 2020. With the growth of our high-tech industries, China will certainly become an important partner and hopefully a market for our innovative products – in such promising sectors as nanotechnology, biology, medicine, medical equipment and others.

Russia remains the world leader in commercial space launches. This is indeed one of our high-tech industries. I believe that joint space exploration programmes could provide a boost to the level of technological development of both Russia and China. This should involve more than just manufacturing rockets and performing launches in the interests of other countries. A whole chain of related industries is linked up with this, such as remote sensing of the Earth from space, which companies use for various purposes, including mineral prospecting. The same is true for satellite positioning systems: Russia has advanced a long way in developing its GLONASS navigation system. It uses a constellation of some 26 satellites currently in orbit, so it is almost global now. We are even a small margin ahead of our European partners, even though we started these programmes at the same time.

Another part of the GLONASS programme involves ground equipment which also needs to be developed. In this aspect, our Chinese partners could provide us with very useful technologies, production facilities and qualified personnel. This, in turn, would not just improve production and marketing, but would benefit the entire national economy through land, sea and air shipments and other related industries. It is my view that if we go down this path, we won’t do any harm – rather we will open whole new horizons.

Question: Russia has been trying to join the WTO for 17 years. Do you believe it will be able to complete this process before the end of this year?

Vladimir Putin: China had to negotiate its entry into the WTO for 15 or 16 years as well.

Correspondent: Yes, we are very similar in that respect.

Vladimir Putin: We want to join the World Trade Organisation. This is our goal and our objective. In our opinion, this would have a generally positive impact on the Russian economy, mostly because it will increase the level of trust in the economy, and on the administrative and legal procedures within the economy. By the way, we have fully adjusted our domestic legislation to WTO requirements. We have done this. We have also settled the major problems with all of the key partners. I think that it has become more of a political issue.

That is, if our main partners in Europe and the Untied States want Russia to be a WTO member and the organisation itself to be truly universal – it cannot be described as universal without Russia. It has certainly lived and may continue to live without Russia, yet Russia is the largest oil producer and exporter, and it would be better if it were a WTO member. Russia also has limited possibilities in other spheres. There are many such spheres that influence global trade, so it would be better if Russia was a WTO member. But I repeat that this does not depend on Russia alone, but also on its partners.

We have held lengthy debates on the issues of WTO cooperation in agriculture, sanitary protection measures, quotas and the like. We later held equally long and boring talks on production rules in the automobile industry. Overall, we have resolved the key problems. We expect this process to be completed this year. For our part, we have done everything to make this happen. I am sure that this issue, I repeat, has become political, and so the outcome depends on our key partners.

As for China, we are grateful to our Chinese friends for supporting Russia’s WTO bid. By the way, our companies in primary production spheres are divided over the WTO membership. Some say that Russian producers have not yet reached the competitiveness level of their US, European and even some Asian partners in some economic spheres, so it would be better to remain outside the WTO market. Others are urging us to join. I believe in the overall positive result of Russia’s entry into the WTO – but, I repeat, on standard terms and with obligatory agreements on protecting certain sectors of the Russian economy until they become really competitive. I repeat, we have coordinated the key parameters.

Correspondent: I wish Russia luck!

Vladimir Putin: Thank you.

Question: I have two personal questions. I know that we are pressed for time. You are very well known in China as a versatile politician. You have a black belt in judo, have flown a fighter plane, submerged in a submarine and gone scuba diving . How does all of this help you in politics?

Vladimir Putin: Frankly, I don’t see anything extraordinary in this. Hundreds and probably even thousands of people practice judo or other martial arts, including Chinese forms. In general, I think that all martial arts are based on Chinese arts one way or another. Everyone knows about wushu. A vast number of people fly planes and even more scuba dive. I just like new things, I love them.

Question: But few people do all of this.

Vladimir Putin: You know, I think there are many such people. But they are not talked about or shown on TV. Personally, I have many such acquaintances. Really, I like to take up something new, to learn some new skill. This is true. I love the process. Currently, I’m learning to skate. I never skated before. I told Prime Minister Wen Jiabao about this today. We talked about many things.

However, it is apparent that when I do this, I largely do this to help Russia win the right to host major sports events. First of all, I do this to attract people’s attention to the importance of healthy living, enhance their interest in sports, physical fitness, and to encourage them to take care of their health. Sports help in all fields of the human endeavour, including politics, business and industry. No matter where you work, it always helps if you are healthy.

I remember visiting a Shaolin Temple and watching the remarkable performance of the monks who practice martial arts. I envied them. I can’t do what they do.

Question: It is true that you like to learn something new and you are said to be a man who is ready to take on various challenges. You had a very difficult job. You wrote that you were like a galley slave, yet you decided to take up this job once more. What is your vision for Russia’s future development? And why are you ready to accept this difficult job again?

Vladimir Putin: I think that the decision that I have taken jointly with incumbent President Dmitry Medvedev was absolutely the correct one because it will not weaken, but rather strengthen the governance system in Russia. This is first.

Second, we hope the electorate will support us because we think that we have negotiated a very difficult period in Russia’s life and economy, which is associated with the global economic crisis, with minimal outlays.

We also acted properly before the crisis. When I was president, the number of people living below the poverty level halved – I think it was our main achievement – while the economy doubled. I repeat that we have emerged from the economic crisis, which hit our country rather painfully, with minimal losses. We know what we should do and how we can achieve the best possible results in the development of the country and its economy, as well as in the social sphere. So, I believe that we should let the people, Russian citizens, judge our proposals during the parliamentary and presidential elections. I repeat again that we have a clear understanding of what we should do and how we should do it. We are acting openly and honestly regarding the challenges that we are facing. We tell the people honestly and openly in our (election) platforms what we intend to achieve, which I believe is the most important thing.

Of course, it is very good when a politician also does sports. This is important, but it is much more important to be open and honest with the people, to have the skill to clearly put forth one’s stance, to talk about difficulties and perspectives and to propose the most balanced – I repeat, balanced – solutions for achieving the goals of your country’s strategic development. Incumbent President Dmitry Medvedev and I have relevant ideas and we want to present them to the country.

Correspondent: Good luck!

Vladimir Putin: Thank you.

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